Utah tax cut likely next year
Flat-rating, rebracketing are among relief options
And while there are all kinds of tax-cut talk, the state's personal income tax should be cut and the easiest and best way to do that is by rebracketing the current tax, say House Speaker Greg Curtis, R-Sandy, and House Majority Whip Steve Urquhart, R-St. George.
Both men say the current heavy debate over a flat-rate income tax — and whether to include deductions for charitable giving, mortgage interest, etc. — might well be good for public discussion. But when push comes to shove in the 2006 Legislature, it's best to keep it simple, direct.
"We should reduce the income tax; that's where the tax-revenue growth is," said Curtis.
"We should just rebracket the current tax" to give tax cuts, said Urquhart.
"It's simple and gives relief to low- and middle-income Utahns," said Urquhart. He favors about $40 million in tax cuts.
Staying away from a flat-rate tax system solves all kinds of political pitfalls as well, the two leaders said. You don't have to argue about dumping "sacred-cow" deductions, because they would be kept as is in the current system.
Gov. Jon Huntsman Jr. said this week that while he still doesn't think there should be a tax cut next year, he's willing to discuss any kind of tax policy, including tax cuts.
Huntsman's "brain trust," a trio of tax experts, was scheduled to present the governor's "flatter-rate income tax" reform ideas Monday morning to the Tax Review Task Force. But the meeting was quickly canceled Thursday after the men said they have not been able to amass sufficient data to see exactly how Huntsman's plan would affect thousands of Utah families. Huntsman will still present a plan, but at a later task-force meeting.
Urquhart, who has already announced that in 2006 he will challenge U.S. Sen. Orrin Hatch within the Republican Party, said: "The state is flush with money. And it is the taxpayers' money, not the state's. Taxpayers should get some relief."
While Huntsman has talked about helping economic development through a business-friendly tax system, Urquhart said lower personal income tax "is economic development, too, because all workers, including CEOs, look to see how much money is being taken out of their paychecks by government."
The state had more than $600 million in extra cash last year. Some was spent, some diverted to rainy-day savings accounts. Of the $106 million that was officially left over at the end of the fiscal year, June 30, about $80 million came from personal income taxes, said Urquhart, who sits on the Tax Reform Task Force, which must have specific reform recommendations by Dec. 31.
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